The press doesn’t usually cover this well, but in many European countries a vicious economic struggle is taking place behind the scenes: oligarchs like those who dominate Russia and Urkaine are trying to hold on to their ill-gotten wealth from the collapse of communism, and they are doing what they can to buy politicians and judges to get profitable government contracts and protect their holdings. Meanwhile, Russian companies and oligarchs are looking for opportunities to buy influence. When these forces mesh—and they frequently do—elected officials and eurocrats are both nearly helpless. In countries like Ukraine, Moldova, Bulgaria, and Romania this is obvious, but the struggle extends into most of the ex-Warsaw Pact countries.
The Financial Times gives us a glimpse into Bulgaria, where the current President took a moment to rail against corrupt procurement practices in the country’s public sector, which have brought EU fines and arguably caused a run on one of its largest banks:
The technocrat president appeared to be taking aim at a deal announced in May in which the state-owned Bulgarian Energy Holding (BEH) signed up several Sofia-based private contractors to build the Bulgarian leg of the pipeline, which would carry Russian natural gas across the Black Sea to Austria.
The project faces criticism over the €3.5bn price tag for the Bulgarian section, which Sofia based energy consultants say is almost three times what it would cost to build in central Europe.
It was at the centre of fresh controversy last week after a company controlled by Gennady Timchenko, who is on the US sanctions list, pulled out of a joint venture with BEH on South Stream. The company, Russia’s Stroytransgaz, was replaced by a Gazprom subsidiary without any tender for the contract.
These days, as the geopolitical rivalry heats up between Russia and the EU, this isn’t just a problem of good governance and social justice. It is also about national strategy. One of Vladimir Putin’s goals is to use a combination of shrewd diplomacy, energy power, and economic clout to secure the ability to block EU actions against him from within the union. Failing that, he can hope to disrupt and undermine the cumbersome policymaking process of the EU, weakening it still further on the global stage.
This is the kind of thing that U.S. and EU diplomats, law enforcement agencies and other government officials ought to have been focusing on all along, but the EU isn’t very good at strategic thinking, and the U.S. has been distracted and confused. Both have also been overconfident, assuming that Russia had no real ability to interfere with Western goals in any serious way; this is a mistake. Now it’s time to play catch up, and working with the EU to help genuinely democratic forces in these countries build stronger states, enforce the law, and keep Russian influence within bounds should be priorities.
Working together to build democracy and fairness in Europe—that’s something the U.S. and its democratic allies have been working on for almost 70 years now, and we’ve had a lot of success. This is not the time to give up.